Question

Question1:

The following financial statements were prepared at the end of the month of May:

TOPS IN TOPIARY - INCOME STATEMENT FOR the month of May

Revenue		$2,540
Expenses:
Rent Expense	$500
Advertising Expense	$500
Wages Expense	$200	$1,200
Net Income		$1,340

TOPS IN TOPIARY - STATEMENT OF OWNER'S EQUITY FOR the month of MAY

Owner's Equity at May 1	$0
plus: Investment	2,000
plus: Net Income	1,340
less: Withdrawals	0
Owner's Equity at May 31	$3,340

TOPS IN TOPIARY - BALANCE SHEET AS OF MAY 31

ASSETS		LIABILITES AND OWNER'S EQUITY
Current Assets:	Current Liabilities:
Cash	$1,380	Accounts Payable	$300
Accounts Receivable	$1,500	Advertising Payable	$500
Prepaid Rent	$ 500	Advances from Customers	$200
Prepaid Advertising	$ 500
Supplies	$ 100		$3,980
Equipment	$ 360	Owner's Equity	$3,340
Total Assets	$4,340	Total Liabilities & OE	$4,340

During June the following transactions occurred:

1) Paid the helper the $1,000 owed from works done in May (the amount owed is in Accounts Payable).

2) Completed the job for which the customer paid $200 in May. Tops in Topiary collected $2000 in cash once finished.

3) Paid $500 for the rent of July.

4) At the end of June notices that there are no supplies left. Makes a note to buy some in July.

5) At the end of June notices that there are few flyers left (used for advertising) worth $200 and decides to order some for July. Before ordering, the printer (supplier of flyers) asks to be paid $600 of the amount owed for the flyers done in May. Tops in Topiary pays $600.

6) In June collected in cash $3,000 for 3 jobs are done for a total of $4,500, the rest is owed in account by the customers.

7) In June decided to start depreciating the equipment bought for $360 that is expected to last for 3 years.

8) In June 23rd Edward Scissorhands withdrew some cash for personal reasons ($2,000).

Prepare "T" Accounts in ACCRUAL Basis for the period ended on June 30th and then answer the questions.

Question1:

At the end of the accounting period (June 30th, T account after AJE), what is the balance of Cash/Bank account (use only one account for all cash/cheque transactions)

a. Less than $800

b. Between $1,200 and $1,599

c. Between $1,600 and $2,000

d. Between $800 and $1,199

e. More than $2,000

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-

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Question 2

The following financial statements were prepared at the end of the month of May:

TOPS IN TOPIARY - INCOME STATEMENT FOR the month of May

Revenue		$2,540
Expenses:
Rent Expense	$500
Advertising Expense	$500
Wages Expense	$200	$1,200
Net Income		$1,340

TOPS IN TOPIARY - STATEMENT OF OWNER'S EQUITY FOR the month of MAY

Owner's Equity at May 1	$0
plus: Investment	2,000
plus: Net Income	1,340
less: Withdrawals	0
Owner's Equity at May 31	$3,340

TOPS IN TOPIARY - BALANCE SHEET AS OF MAY 31

ASSETS		LIABILITES AND OWNER'S EQUITY
Current Assets:	Current Liabilities:
Cash	$1,380	Accounts Payable	$300
Accounts Receivable	$1,500	Advertising Payable	$500
Prepaid Rent	$ 500	Advances from Customers	$200
Prepaid Advertising	$ 500
Supplies	$ 100		$3,980
Equipment	$ 360	Owner's Equity	$3,340
Total Assets	$4,340	Total Liabilities & OE	$4,340

During June the following transactions occurred:

1) Paid the helper the $1,000 owed from works done in May (the amount owed is in Accounts Payable).

2) Completed the job for which the customer paid $200 in May. Tops in Topiary collected $2000 in cash once finished.

3) Paid $500 for the rent of July.

4) At the end of June notices that there are no supplies left. Makes a note to buy some in July.

5) At the end of June notices that there are few flyers left (used for advertising) worth $200 and decides to order some for July. Before ordering, the printer (supplier of flyers) asks to be paid $600 of the amount owed for the flyers done in May. Tops in Topiary pays $600.

6) In June collected in cash $3,000 for 3 jobs are done for a total of $4,500, the rest is owed in account by the customers.

7) In June decided to start depreciating the equipment bought for $360 that is expected to last for 3 years.

8) In June 23rd Edward Scissorhands withdrew some cash for personal reasons ($2,000).

Prepare "T" Accounts in ACCRUAL Basis for the period ended on June 30th and then answer the questions.

Question 2:

At the end of the accounting period (June 30th, T account after AJE), what is the total of Assets?

A. Between $2,000 and $2,999

B. More than $5,500

C. Between $4,500 and $5,500

D. Between $3,000 and $4,499

E. Less than $2,000

Answer 1

Question1:

At the end of the accounting period (June 30th, T account after AJE), what is the balance of Cash/Bank account (use only one account for all cash/cheque transactions)

Answer:

Option e. More than $2,000

Workings

Question 2:

At the end of the accounting period (June 30th, T account after AJE), what is the total of Assets?

Answer:

Option B. More than $5,500

Workings

Total Assets
Cash	2280
Accounts Receivables	3000
Prepaid Rent	500
Prepaid Advertising	200
Supplies	0
Equipment	350
Total Assets	6330

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